Stock Donation Platform for Nonprofits

It is not intended to be, and should not be construed as legal or tax advice. Availability of certain federal income tax deductions may depend on whether an individual itemizes deductions. Charitable contributions of capital gain property held for more than one year are usually deductible at fair market value. Deductions balance sheet for capital gain property held for one year or less are usually limited to a cost basis. Consult an attorney or tax advisor regarding specific legal or tax situations.

Rules for Accepting Donations as a Nonprofit Organization

Here’s what your fundraising team needs to know about the relationship between nonprofit stock donations and matching gifts. You should have someone on your team monitor the brokerage account daily so you can immediately value the shares for your donor tax-receipt. If your policy is to sell the shares upon arrival, it’s better to sell the shares the same day so you don’t have an accounting difference between the donated value, and the actual cash proceeds. All donations should be tracked using an accounting program or your CRM. The information CRMs will ask for include the value of the stock, receipt date, stock ticker, date of sale, and number of shares. First, donating stock allows donors to avoid both capital gains and state income taxes that they would otherwise need to real estate cash flow pay if they instead sold the stock to donate cash.

Traditional Brokerage Accounts

When donors use your Every.org donation form, we record all relevant details—ticker symbol, share quantity, and your nonprofit’s name and EIN. Please avoid sharing stock transfer instructions directly to prevent delays. DonateStock has ignited a conversation in philanthropy with its innovative approach to stock gifting. By reducing the friction for donors and nonprofits, stock gifting is now accessible and easy for everyone – and now donors can donate stock to their favorite cause in just a few clicks. You can also request a match for a monetary or stock donation you’ve already made. The more popular stock grows as a form of nonprofit giving, the more companies will adopt stock-inclusive matching gift program guidelines.

Promote stock donations to your donors

For one, gifts of securities such as stocks enable donors to contribute more to an organization and its mission than they might be able to on their own. Stock donations are also referred to as gifts of securities, which typically encompasses transfers of stocks, bonds, or mutual funds. In most cases, online stock donation funds are sent out in less than five days. Someone who wants to donate stock, ETFs, or mutual funds to your charity will fill out a quick and easy webform. We have a how to guide to use the stock donation form for those that need extra help. No longer do you have to share your brokerage information with strangers to accept stock donations.

Stock donations will be processed through Renaissance Charitable, the sponsoring charity for donor-advised fund programs, and will be distributed in the form of a check. Donors complete a quick form with their brokerage details and the stock they wish to donate. There’s real-time donor transparency as your nonprofit gets notified and the donor and/or advisor receives all required information to complete how to accept stock donations the transaction.

How to accept nonprofit stock donations

In that case, you might be drifting away from charitable donations and toward UBI, even if you use the proceeds to run your childhood literacy organization. Most conventional forms of solicitations—such as galas, auctions, fun runs, or even internet fundraising—are entirely allowable tax-exempt donations. Where it gets murky is when it comes to unrelated business income, or UBI. For other donation methods, such as credit cards, we do pass on third-party transaction fees.

• You’ll also want to establish a formal investment policy, since you may not want to accept all types of stock donations.
• Both the donor and nonprofit dashboards are then updated and DonateStock sends each an email to confirm the transaction is in process.
• If you sell, you’ll want to do so the same day you receive the stock so you can provide a receipt to your donor on the value they gifted to you.
• Accepting donations of securities is an excellent way to boost the growth of your nonprofit and provide a ready source of cash flow for operations.
• Their mission is to enable all young people to reach their full potential as productive, caring, responsible citizens.

For example, some companies consider gifts of securities a particular form of in-kind donation (which the company chooses whether or not to match based on their program guidelines). In that case, stock donations made by employees of these companies will be eligible as long as that company matches in-kind gifts. Piedmont Healthcare utilizes its website to encourage stock donations by interested supporters. One way they do so is by briefly highlighting the benefits to both their institution as well as to the donor contributing the appreciated securities (of both stocks and mutual funds). That’s because when an individual sells their stock, they’re subject to pay significant capital gains taxes, which are not applicable should they transfer the stock to the receiving organization. While stock donations typically involve the transfer of shares within a single company, mutual funds can include a portfolio of thousands of stocks, bonds, and other securities compiled as a single entity.

When does the nonprofit receive its donated funds?

If, however, your charity’s website is gradually taken over by your business of selling merchandise—even though it promotes literacy—the regularity and scale of the business may overwhelm its charitable intent. 1095Hawk is the most effective way to prepare and file your organization’s ACA 1095 forms. The August and November 2024 Nonprofit Connection newsletters included articles about best practices for segregation of duties related to the cash receipts, cash disbursements, payroll, and… Nonprofit Tech for Good regularly hosts webinars for the nonprofit sector on topics useful to digital marketers and fundraisers. Instruct your broker to transfer shares to Piedmont Healthcare Foundation by contacting Truist Bank via phone or email.